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26 Cards in this Set
- Front
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Hjalmar Schacht
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GR economist, commissioner who co founded GR Democratic party. firm supporter of Hitler, helped implement his policies of redevelopment. forced out of gov by disagreeing with Hitler. later imprisoned and acquitted.
helped negotiate Dawes plan when GR currency was unstable. supported public work plans for unemployed. introduced GR's new plan in hopes of autarky/self sufficiency, solved the GR depression. pillar of intl gold standard orthodoxy. He ended inflation. printing pressers were stopped and announced rentenmark that would be backed by property. Mark’s value held study for first time in years |
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development nationalism
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protectionist populist dictatorships serve urban labor and capital at expense of landowners.
one response to Great D. when GD hit developing countries their exports and prices of primary product fell. developing couldn't import manufactured goods or take out loans. linkage to Landed elites were discredited and new populist forces came in, capitalists and urban workers took power. Political institutions were remade to empower them, like Juan Peron in Argentina. Shifted to autarchy, separated from world economy. • Fascism, S, E and Central Europe, protectionist. Served capital and small business at expense of labor. Hitler in GR and Mussolini in IT. |
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pre 1929 orthodoxy
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prevailing idea of self correction/laissez fiare. opposed gov regulation. business cycles fluctuate recovery recession, natural and necessary.
assumed investors would be forthcoming and economy would revive, didn't in Great D. Great D was consequence of excesses of 20s according to the orthodox. liquidationists, Mellon, argued the econ had to liquidate all bad invetsments/loans to recover. once prices/wages fell enough capitalists would hire, consumers would buy. as those numbers went down, demand would rise until balance. |
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laissez faire
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opposed gov regulation, hands off beyond the necessary. end of 19th C, EU took up protectionism, FR canceled free trade, GR had iron and rye of 1879.
approach to econ policy too lax and uninvolved, leads to protectionism. |
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liquidationism
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need to liquidate bad stuff before recovery.
1929 -33 slide into great D, federal reserve took no steps to keep money supply or price level stable. federal reserve acted as if the great d couldn't be avoided and best to endure. common theory before KEynes, didn't work, disaster. |
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fascism
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protectionist, served capital and small business at expense of labor. believe in giving full interest in econ, social miliatary power to dominant race/state lead by one leader. seeks to purify nation of foreign influence deemed to be cuasing degeneration. wants to eliminate capitalism socialism and democracy.
Autarchic authoritarian response to the Great Depression. S, E and Central Europe. italy/mussolini and GR/hitler were biggest after WWI. fascism preaches hatred of left wing labor, foreign bankers, and domestic business with foreign ties. modern industry and labor are cause of social dislocation. spurred WWII |
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business cycle
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alternating period of growth/decline. pre 1929 orthodoxy says they are natural and necessary, in 30s the econ didn't recover, prices kept falling.
prices/wages falll --> capitalists --> consumers, never hapened. |
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keynes' general theory
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investment depends on expectation of behavior of others. can't depend on low wage to bring new investments (no individual capitalist will expand if little prospect for demand, no matter how low wages/interest rates go).
vicious circle: stuck in depression, negative expectations aggregate that demands stay low. if all capitalists expend demand low then no action. people rational as individuals but not in group. aggregate demand: sum of all investments and consumption, negative expectations for future these stay low. by consumers, producers, gov. new gov role suggested: counter cyclical demand management!! monetary policy: lower/raise interest rates to encourage/discourage demand. fiscal policy: use gov spending/taxation to sustain/limit pace of econ. can stimulate aggregate demand directly bc gov can create new jobs! like new deal!! breaks from orthodoxy, which failed. public policy can be used to shift expectations en masse. |
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social democracy
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opposes fascism. responds to great D through counter cyclical demand management. supports legal entitlements in social rights for citizens/public services.
socio democratic responses to great d US: uses counter cyc demand manage, social insurance, class bargaining between labor and capital, counter cyclical demand management. o Scandinavian, cradle to grave social insurance. |
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social insurance
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social security, disability, unemployment...welfare instituions put in place to reduce damage of G on losers. in scandinavian places there are cradle to grave. heavy in CA not in TX. back to the two governors and how they approach immigrants.
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welfare capitalists
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practice of business providing welfare like services/benefits to employees.
post WWI, us isolationist, period mass production/consumption. some companies offered benefits to employees to increase productivity. wage incetives for example EX: ford offered daily pay rate increase to reduce turnover. encourage good attendent and build loyal labor force. SSA of 1935 was start to welfare states in US, tied social insurance to labor force participation. important to keep labor happy if it is at a small cost to the company. |
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farm/labor alliance
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socialist parties like in denmark and norway, worker farmer alliances were brough to power at teh end of the great d.
during G.D. the prolabor policies promised to to give agrarians tariffs and price supports for food, local food. in return for supporting the social democrats prolabor policies. Swedish farmer-labor alliance. Before it was free trade laborers and protectionist agrarians. Workers wanted cheap food and farmers wanted low wage labor. In 1936, Swedish working class will pay necessary price to guarantee farmers a tolerable living standard. |
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new deal
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FDR enacted during great d, as relief/recovery/reform. prevented further depression. stimulated econ but didn't solve problem. gave rise to many new programs, SSA, CCA, CWA, WPA and gave social insurance, reduced unemployment. forged alliace between farmers and urban labor, centralized gov.
took off gold which helped farm prices rise. |
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communism
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protectionist dictatorships that serve labor at expense of land capital.
as response to great d, soviets when communism. Autarchic Authoritarian. |
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counter cyclical demand mangement
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Keynes idea: could reduce amplitude of business cycles with monetary policy (change interest rates to encourage demand) and fiscal policy, use gov spending/taxation to change pace of econ.
emphasizes fiscal taxes and spending BC interest rates might be pushed to 0 and capitalists would still not invest if they expected low demand. fiscal stimulates aggreggate demands when gov creates jobs. break from pre 1929 orth. public policy can shift expectations of public. gov can reduce amplitude of business cycles. |
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lend lease program
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WWII, between US and allies, US supplies with ammunition they give it back, FDR. needed to help allies without intervening, but people didn't like it. this was part of the planning for pax america. decisive step away from non interventionist policy like WWI. allies were to borrow, like garden hose in fire.
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deficit spending
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when gove spends more than income. gov exceeds tax revenues.
part of keynesian econ developed during great d. FDR utilized deficit spending for countercyclical fiscal policy, creates jobs! deficit is seen as bad but when there's high unemployment it is good for the gov to create opportunity for demand. raises real GDP and employes people. |
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atlantic charter
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US/Uk agreement that was done before US enters way. plan for post WWII econ order. even though outcome still in doubt. negotiated by churchill and FDR, 1941. sought global econ coop. secret bc congress didn't want it, still isolationists
agreed to no territorial gains in WWII, right to self determination, UK gives up colonies, lower trade barriers, UK open colonies to trade, • Global economic cooperation: general agreement to commit to cooperate. UK were giving agreement to follow US lead, to be engaged in global problems, work cooperatively at addressing the problems. Later adopted by all alliance countries. 1942 there was general commitment. secret let out after. |
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bretton woods
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Established some international institutions, IMF and the world bank. IMF function is to provide balance of payment support, loans to countries that can no longer borrow from private/public?? While they try to get back to equilibrium.
wanted to rebuild intl econ system after WWII. 730 delegates from all allied nations signed bretton woods agreement in 1944. obligation for each country to adopt a monetary policy that maintained the ER by tying its currency to US dollar ability of IMF to bridge temporary BOP. dollar pegged to gold, all others to dollar. half fix/float. |
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unholy trinity
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trilemma which states you can't have FIXED (promotes G and stability through constant ER), CAPITAL MOBILITY (free movement of capital in/out of country) and DOMESTIC MONETARY AUTONOMY, being able to control your shiznit.
choose 2/3 is important, need to decide on ER, must weigh benefits of each and see what their country needs. MX choose fixed ER in 1994, pegged to dollar and capital mobility meant they had no dometsic autonomy. reduced inflation greatly for a while due to this. 90s other countries who did this suffered great currency crisises. MX had political problems and it led them to a crisis. |
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dean acheson
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principle architect of post WWII policy. cenral role in defining US foreign policy during cold war. helped design marshall plan, truman doctrine, bretton.
followed Wilson’s intl and new deal’s socialism. Undersecretary of treasury in 1933. Opposed new currency management, he was forced out of office. G D dragged on Acheson supported ne deal. o Reduced US trade barriers, financed in EU to get commitment to econ coop, created stable monetary order, broke down foreign protectionism. |
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logrolling
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trading votes by legislative member to obtain passage of actions of interest to each legislative member. i'll vote for goods in your district if you do the same. smoot hawley.
common prior to RTAA. led to protectionism, elimated by RTAA o Reciprocal trade agreement act because president then chose and he considered costs of tariffs beyond their district benefits. gave tariff decision making to executive branch. |
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reciprocal trade agreements act
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1934: first widespread system of bilateral trade agreements. gave president power to negotiate not congress.
FDR used this to help revive great d, lowered trade barriers. before this US was protection, partisan and logrolling. after they aren't! prevents logs BC congress doesn't dictate tariffs anymore. FDR liberalized US trade and broke from trend of tariff increases. ushered in new era of liberal trade policy that we still have. President considers aggregate welfare, his foreign policy priorities, and what is possible. these all leave him mor einclined to reduce tariffs. delegation to president gave control to politician with nation's interests at heart, not districts. |
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marshall plan
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1948-1951, provided 13.2 billion for EU recovery after WWII. aimed to prevent them from falling into communism. truman got support from republicans who were still isolationist, for it with threats of containment from soviets. spreading communism!! containment idea joined with NATO and Marshall plan.
US had weak support, isolationism still hot despite intl views of the weak truman admin. led to growth in W EU. facilitated E integration by erasing trade barriers, required the econs have balanced budged financial stability and stable ER. |
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truman doctrine
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policy after 1947, provide econ and military aid to GR/Turkey because they were threatened with communism. start of containment policy to stop soviet expansion.
1946-7 US and soviets move to war, cold war, major step in beginning the war. dealt with US concern over communism domino effect, one goes they all go, enabled a media sensitive presentation of the doctrine that won bipartisan support and mobilized US econ power to modernize and stabilize unstable regions without direct military intervention. brought nation building, modernization to forefront of foreign policy. |
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hegemonic stability theory
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intl system more likely to remain stable when single nation state is dominant world power, when it can articulate and enforce rules among all members.
commit to mutually beneficial system. |
